Ericsson fined $206 million for violating Justice Department bribery agreement

Photo: Mark Schiefelbein (AP)

Swedish multinational technology giant Ericssond guilty this week of bribery and agreed to pay Department of Justice $206 million dollars. Federal prosecutors accused Ericson’s endearing in a longrunning an international corruption scheme that involved bribing and falsifying government officials defeated, and failure to enter proper account controls. Ericsson had a chance to drop those charges under a deferred prosecution deal, but ultimately blew it by failure to provide evidence.

All toldEricsson has issued over $1 billion to settle criminal and civil bribery charges since 2019. When it comes to simple, old-fashionedold-fashioned corruptionEricsson seems to have an edge over its larger international rivals.

What kind of corruption is Ericsson accused of?

In 2019, Ericsson then entered into a Deferred Prosecution Agreement (DPA) with the DOJ agree to pay $520 million after a criminal indictment in which it was accused violating the Law on Corrupt Practices Abroad. In a DPA, prosecutors can sue companies for crimes, but agree to eventually drop those charges if certain conditions are met. In the case of Ericsson, the company’s data protection authority requires it to maintain a compliance monitor for three years and fully cooperate with authorities.

But that didn’t happen. Instead, DOJ prosecutors allege that Ericsson violated that agreement by “failing to truthfully disclose all factual information and evidence” regarding its shady dealings in Djibouti and China. Likewise, Ericsson has not disclosed allegations of wrongdoingconduct in Iraq that may violate the Foreign Corrupt Practices Act.

“When the Department offered Ericsson the chance to enter into a DPA to resolve an investigation of serious FCPA violations, the company agreed to comply with all provisions of that agreement,” said DOJ assistant. Attorney General Kenneth Polite, Jr. in a statement. “Instead of honoring that commitment, Ericsson has repeatedly failed to fully cooperate and disclose evidence and allegations of misconduct in violation of the agreement.”

In a rackEricsson CEO Börje Ekholm said the latest fine serves as a “stark reminder” of the company’s historic misconduct.

“By taking this step today, the issue of breaches has now been resolved,” Ekholm said. “This allows us to focus on executing our strategy while driving ongoing cultural change across the company, with integrity at the heart of everything we do.”

Prosecutors allege Ericsson is involved in the 16-years of bribery and corruption solidify its presence as one of the world’s leading suppliers of 5G telecommunications equipment, particularly in developing countries. The company this week announced are lay of about 8,500 employees, or about 8% of the total workforce, over the next two years after slower-than-expected 5G rollouts in the fourth quarter of 2022.


Leave a Reply

Your email address will not be published. Required fields are marked *